Here's another useful explanation:

"we will be creating markets that will look like BITCOIN/BTC, LITECOIN/LTC etc. The purpose of these markets is to separate out gatewayable assets from non-gatewayable assets (you can withdraw BTC immediately, but BITCOIN is just something that stores and transfers 1 bitcoin worth of VIVA, according to the coinmarketcap). Once the viva.cash gateway launches, the BTC, LTC, etc assets will be gatewayed there and TQ will be dealing exclusively in vX as designed. For now we just need to carry this load as we get the economy moving and I don't want to get into a situation where we end up with a fractional reserve that we would then have to remedy in order to make things work correctly again. So just keep in mind BTC = I want on or off of VIVA. BITCOIN = I want to hedge. BITCOIN and other vX will gain an interest rate in order to encourage their holding, and the more complicated formula that relied on reserves will just go away and we revert to a fixed spread again."